<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934.
For quarter ended April 30, 1997
------------------
Commission file number 0-17517
------------------
Sea Pines Associates, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
South Carolina 57-0845789
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
32 Greenwood Drive
Hilton Head Island, South Carolina 29928
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(803) 785-3333
--------------
(Registrant's telephone number, including area code)
No Change
---------
(Former name, former address and former fiscal year, if
changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
The number of shares outstanding of the registrant's common stock as of April
30, 1997 was 1,842,525.
<PAGE> 2
INDEX TO FORM 10-Q
FOR SEA PINES ASSOCIATES, INC.
Page
----
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets as
of April 30, 1997 and October 31, 1996 3 - 4
Condensed Consolidated Statements of Operations for
the Six Months Ended April 30, 1997 and 1996 5
Condensed Consolidated Statements of Cash Flows
for the Six Months ended April 30, 1997 and 1996 6
Notes to Condensed Consolidated Financial Statements 7 - 8
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 9 - 12
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings 12
Item 2 - Changes in Securities 12
Item 3 - Defaults Upon Senior Securities 12
Item 4 - Submission of Matters To A Vote of
Security Holders 12 - 13
Item 5 - Other Information 13
Item 6 - Exhibits and Reports on Form 8-K 13
Signatures 14
<PAGE> 3
SEA PINES ASSOCIATES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
APRIL 30, OCTOBER 31,
1997 1996
ASSETS (UNAUDITED) (NOTE)
------ ------------ -----------
<S> <C> <C>
CURRENT ASSETS:
CASH AND CASH EQUIVALENTS:
UNRESTRICTED $ 24 $ 232
RESTRICTED 2,661 1,196
------- -------
2,685 1,428
ACCOUNTS AND NOTES RECEIVABLE, NET OF ALLOWANCE FOR
DOUBTFUL ACCOUNTS OF $27 AT APRIL 30, 1997
AND OCTOBER 31, 1996 1,860 1,029
CURRENT PORTION OF NOTES RECEIVABLE 497 344
INVENTORIES (NOTE 2) 781 733
PREPAID EXPENSES 221 293
------- -------
TOTAL CURRENT ASSETS 6,044 3,827
------- -------
NOTES RECEIVABLE OTHER 1,602 1,617
NOTES RECEIVABLE AND ACCRUED INTEREST FROM
TIDEPOINTE PARTNERS 1,775 1,694
INVESTMENT IN TIDEPOINTE PARTNERS 750 809
DEFERRED LOAN FEES, NET 34 49
OTHER ASSETS, NET 104 91
REAL ESTATE BROKERAGE INTANGIBLES, NET OF ACCUMULATED
AMORTIZATION OF $1,244 AND $1,179 AT APRIL 30, 1997
AND OCTOBER 31, 1996, RESPECTIVELY 66 131
REAL ESTATE ASSETS
CONSTRUCTION IN PROGRESS 8,895 8,113
OPERATING PROPERTIES, NET 22,469 22,879
PROPERTIES HELD FOR FUTURE DEVELOPMENT 7,047 7,047
------- -------
38,411 38,039
------- -------
TOTAL ASSETS $48,786 $46,257
======= =======
</TABLE>
NOTE: THE CONDENSED CONSOLIDATED BALANCE SHEET AT OCTOBER 31, 1996 HAS
BEEN DERIVED FROM THE AUDITED FINANCIAL STATEMENTS AT THAT DATE BUT
DOES NOT INCLUDE ALL OF THE INFORMATION AND FOOTNOTES REQUIRED BY
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES FOR COMPLETE FINANCIAL
STATEMENTS.
SEE ACCOMPANYING NOTES.
3
<PAGE> 4
SEA PINES ASSOCIATES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
APRIL 30, OCTOBER 31,
1997 1996
LIABILITIES AND SHAREHOLDERS' EQUITY (UNAUDITED) (NOTE)
------------------------------------ ----------- -----------
<S> <C> <C>
CURRENT LIABILITIES:
ACCOUNTS PAYABLE AND ACCRUED EXPENSES $ 2,892 $ 2,037
ADVANCE DEPOSITS 2,589 1,223
LINE OF CREDIT WITH BANK 1,250 775
INCOME TAXES PAYABLE -- 142
CURRENT PORTION OF DEFERRED REVENUE 454 371
CURRENT MATURITIES OF LONG-TERM DEBT 820 783
------- -------
TOTAL CURRENT LIABILITIES 8,005 5,331
------- -------
LONG-TERM DEBT 18,302 18,719
DUE TO TIDEPOINTE PARTNERS 8,240 7,073
OTHER DEFERRED REVENUE 358 214
DEFERRED INCOME TAXES 412 412
------- -------
TOTAL LIABILITIES 35,317 31,749
------- -------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
SERIES A CUMULATIVE PREFERRED STOCK, NO PAR VALUE,
2,000,000 SHARES AUTHORIZED; 1,228,350 SHARES
ISSUED AND OUTSTANDING (LIQUIDATION PREFERENCE $9,335,460) 7,218 7,218
SERIES B JUNIOR CUMULATIVE PREFERRED STOCK, NO PAR
VALUE, 3,000 SHARES AUTHORIZED; NONE ISSUED
OR OUTSTANDING -- --
COMMON STOCK, 23,000,000 SHARES AUTHORIZED;
1,842,525 SHARES ISSUED AND OUTSTANDING 2,166 2,166
RETAINED EARNINGS 4,085 5,124
------- -------
TOTAL SHAREHOLDERS' EQUITY 13,469 14,508
------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $48,786 $46,257
======= =======
</TABLE>
NOTE: THE CONDENSED CONSOLIDATED BALANCE SHEET AT OCTOBER 31, 1996 HAS
BEEN DERIVED FROM THE AUDITED FINANCIAL STATEMENTS AT THAT DATE BUT
DOES NOT INCLUDE ALL OF THE INFORMATION AND FOOTNOTES REQUIRED BY
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES FOR COMPLETE FINANCIAL
STATEMENTS.
SEE ACCOMPANYING NOTES.
4
<PAGE> 5
SEA PINES ASSOCIATES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
QUARTER ENDED SIX MONTHS ENDED
APRIL 30, APRIL 30,
1997 1996 1997 1996
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUES $10,460 $10,848 $15,349 $16,184
COST AND EXPENSES:
COST OF REVENUES, OTHER THAN HEALTH CARE 6,761 7,534 10,749 11,875
SALES AND MARKETING EXPENSES 521 603 1,122 1,055
GENERAL AND ADMINISTRATIVE EXPENSES 846 749 1,764 1,914
HEALTH CARE OPERATIONS, NET 540 0 540 0
DEPRECIATION AND AMORTIZATION 369 484 743 968
------- ------- -------- --------
TOTAL COSTS AND EXPENSES 9,037 9,370 14,918 15,812
------- ------- -------- --------
OPERATING INCOME 1,423 1,478 431 372
OTHER INCOME (EXPENSE):
EQUITY IN LOSS OF TIDEPOINTE PARTNERS 0 ( 52) (59) (52)
INTEREST INCOME 85 44 156 91
INTEREST EXPENSE ( 382) ( 366) (758) (739)
------- ------- -------- --------
TOTAL OTHER EXPENSE (297) (374) (661) (700)
------- ------- -------- --------
INCOME (LOSS) BEFORE INCOME TAXES 1,126 1,104 (230) (328)
INCOME TAX BENEFIT (PROVISION) ( 383) ( 375) 78 112
------- ------- -------- --------
NET INCOME (LOSS) 743 729 (152) (216)
PREFERRED STOCK DIVIDEND REQUIREMENT ( 223) ( 223) (445) (445)
------- ------- -------- --------
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK $ 520 $ 506 ($ 597) ($ 661)
======= ======= ======== ========
PER SHARE OF COMMON STOCK
NET INCOME (LOSS) $ 0.28 $ 0.27 ($ 0.32) ($ 0.36)
======= ======= ======== ========
</TABLE>
SEE ACCOMPANYING NOTES.
5
<PAGE> 6
SEA PINES ASSOCIATES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
APRIL 30,
1997 1996
(UNAUDITED) (UNAUDITED)
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET LOSS ($ 152) ($ 216)
ADJUSTMENTS TO RECONCILE NET LOSS TO
NET CASH USED IN OPERATING ACTIVITIES:
DEPRECIATION AND AMORTIZATION 743 968
INCREASE (DECREASE) IN DEFERRED REVENUE 227 (86)
INCREASE IN ALLOWANCE FOR DOUBTFUL ACCOUNTS -- 16
INCREASE IN DEFERRED INCOME TAXES (78) (111)
EQUITY IN LOSS OF TIDEPOINTE PARTNERS 59 --
CHANGES IN CURRENT ASSETS AND LIABILITIES:
INCREASE IN ACCOUNTS AND NOTES RECEIVABLE (891) (856)
INCREASE IN INVENTORIES (48) (162)
DECREASE (INCREASE) IN PREPAID EXPENSES 72 (42)
DECREASE IN OTHER ASSETS 67 99
INCREASE IN ACCOUNTS PAYABLE AND ACCRUED EXPENSES 585 1,130
INCREASE IN OTHER LIABILITIES -- 94
INCREASE IN ADVANCE DEPOSITS 1,366 1,012
DECREASE IN INCOME TAXES PAYABLE (142) (13)
------- -------
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,808 1,833
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
INCREASE IN SHORT TERM INVESTMENTS -- (28)
CAPITAL EXPENDITURES AND PROPERTY ACQUISITIONS (1,287) (2,749)
ADDITIONS TO NOTE RECEIVABLE FROM TIDEPOINTE PARTNERS (81) (80)
------- -------
NET CASH USED IN INVESTING ACTIVITIES (1,368) (2,857)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
PRINCIPAL REPAYMENTS OF DEBT (380) (345)
ADDITIONS TO LONG-TERM DEBT -- 100
ADDITIONS TO SHORT-TERM DEBT 475 1,200
ADDITIONS TO ADVANCE FROM TIDEPOINTE PARTNERS 1,167 1,697
DIVIDENDS PAID (445) (445)
------- -------
NET CASH PROVIDED BY FINANCING ACTIVITIES 817 2,207
------- -------
NET DECREASE IN CASH AND CASH EQUIVALENTS 1,257 1,183
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,428 1,968
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 2,685 $ 3,151
======= =======
</TABLE>
SEE ACCOMPANYING NOTES.
6
<PAGE> 7
SEA PINES ASSOCIATES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 1997 AND OCTOBER 31, 1996
NOTE 1 - BASIS OF PRESENTATION
---------------------
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the six month period
ended April 30, 1997 are not necessarily indicative of the results that may be
expected for the year ended October 31, 1997. For further information, refer to
the consolidated financial statements and footnotes thereto included in the
Company's annual report on Form 10-K for the year ended October 31, 1996.
NOTE 2 - INVENTORIES
-----------
Inventories consist of the following (amounts in thousands):
<TABLE>
<CAPTION>
April 30, October 31,
1997 1996
---- ----
<S> <C> <C>
Merchandise $695 $654
Supplies, parts and accessories 35 35
Food and beverages 14 11
Other 37 33
---- ----
$781 $733
==== ====
</TABLE>
7
<PAGE> 8
NOTE 3 - OPERATING PROPERTIES
Operating properties consist of the following (amounts in thousands):
<TABLE>
<CAPTION>
April 30, October 31,
1997 1996
-------- --------
<S> <C> <C>
Land and land improvements $ 19,549 $ 19,712
Buildings 6,347 6,432
Machinery and equipment 5,494 5,034
Property held under capital leases 251 251
-------- --------
31,641 31,429
Less - Accumulated depreciation (9,172) (8,550)
-------- --------
$ 22,469 $ 22,879
======== ========
</TABLE>
8
<PAGE> 9
The discussion in this Report includes forward-looking statements that involve
risks and uncertainties. The Company's actual results could differ materially
from those discussed herein. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed in Management's
Discussion and Analysis of Financial Condition and Results of Operations in item
II below, as well as those discussed elsewhere in this Report and the Company's
Annual Report on Form 10-K for the year ended October 31, 1996.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The Company's operations are conducted primarily through two wholly owned
subsidiaries. Sea Pines Company, Inc. operates all of the resort assets,
including three resort golf courses, a 28 court racquet club, a home and villa
rental management business, retail sales outlets, food service operations and
other resort recreational facilities. Sea Pines Real Estate Company, Inc. is an
independent real estate brokerage firm with ten offices serving Hilton Head
Island and its neighboring communities.
The Company, through its wholly owned subsidiary, Sea Pines/TidePointe, Inc.,
owns a 17.5% general partnership interest in TidePointe Partners. TidePointe
Partners is a general partnership which is developing and constructing a
continuing care retirement community on Hilton Head Island, South Carolina.
Phase I construction including the clubhouse, spa and two villa buildings is
complete and sales contracts on 84 units of the total 206 units in Phase I had
closed as of April 30, 1997.
Sea Pines Senior Living Center, Inc., a wholly owned subsidiary of the Company,
has completed construction of the health care facility located within the
TidePointe Continuing Care Retirement Community at an approximate cost of
$7,700,000. In February 1997 the facility received its operating licenses from
the South Carolina Department of Health and Environmental Control and began
operations. Operating losses, net of revenue of $152,000 related to the startup
phase of the health care facility totalling $540,000 through April 30, 1997 have
been included in the Company's consolidated financial statements. See further
discussion at Business Outlook and Recent Developments.
On May 1, 1996 the Company turned over the operations and assets of the Sea
Pines Country Club to the equity members as contemplated by the May 1990 Equity
Offering Agreement. Effective with this transfer, the Club obtained control of
all of its physical assets and assumed complete and total responsibility for its
operations and all the other risks and rewards of ownership. Results of Club
operations through the turnover date are included in the Company's Consolidated
Financial Statements.
9
<PAGE> 10
Results of Operations for 1997 as Compared with 1996
The Company reported consolidated net income of $743,000 and $729,000 for the
second quarter ended April 30, 1997 and 1996, respectively. In 1997,
consolidated net income includes net operating losses of $540,000 from the
initial start-up of the health care facility at TidePointe. These operating
losses have been funded by TidePointe Partners and are expected to be recovered
from the sale of the facility in the third quarter. Exclusive of health care
operations, net income from core business activities was $1,283,000 for the
second quarter ended April 30, 1997, a 76% increase over the prior year.
Consolidated revenues during the second quarter totaled $10,460,000, a 3.6%
decrease over consolidated revenues reported for the second quarter of 1996. The
consolidated revenue for the second quarter of 1996 included revenue from the
Sea Pines Country Club of $1,007,000. The Club was turned over to the members
effective May 1, 1996, therefore 1997 does not include revenues from Club
operations.
Resort revenues increased by 9.7% during the second quarter from $7,597,000 in
1996 to $8,333,000 in 1997. This increase is attributable to improved revenues
in the Company's lodging, golf and retail operations.
Real estate revenues decreased by $215,000, or 9%, to $2,128,000 during the
second quarter ended April 30, 1997 from the same period last year. This
decrease reflects the exceptionally strong 1996 second quarter sales which
showed a 41% increase over 1995. Year to date, real estate revenues continue to
run 3.6% ahead of the prior year and are indicative of the continued strong
brokerage sales the Company has experienced.
Cost of revenues decreased by $773,000, or 10.3%, during the second quarter of
1997 compared to the same period last year. This decrease results primarily from
the elimination of costs associated with the Sea Pines Country Club.
Sales and marketing expenses decreased by $82,000, or 13.6%, during the second
quarter of 1997 compared to the same period last year. This decrease is
attributable to the acceleration of certain collateral materials and media
placements into the first quarter of 1997, thus reducing second quarter sales
and marketing expenses.
General and administration expenses increased by $97,000, or 13%, from the same
period last year. This increase is the result of increased property insurance
premiums and legal costs over the prior year.
During the second quarter of 1997, the Company recorded operating losses of
$540,000 from the operations of the health care facility located at TidePointe.
These losses were anticipated and reflect start-up expenditures and patient
level stabilization. See further discussion at Business Outlook and Recent
Developments.
10
<PAGE> 11
Interest expense on the Company's long-term debt remained relatively constant at
$382,000 and $366,000 during the second quarter of 1997 and 1996, respectively.
Liquidity and Capital Resources
Cash and short term investments increased by $1,423,000 during the second
quarter of 1997 and totaled $2,685,000 at April 30, 1997, of which $2,661,000
was restricted. The Company's working capital deficit decreased by $1,408,000 in
the second quarter resulting in a working capital deficit of $1,961,000 at April
30, 1997. The increase in cash and the decrease in working capital deficit are
consistent with the seasonal nature of the Company's operations.
The Company maintains a $2.5 million seasonal line of credit used to meet cash
requirements during the Company's off-season. As of April 30, 1997, the
outstanding balance on the line of credit totaled $1.250 million. In addition to
the seasonal line of credit, the Company maintains a $12 million revolving
credit facility used for capital investments in business lines consistent with
the Company's operations. As of April 30, 1997, the outstanding balance on the
revolving credit facility totaled $7.6 million.
At its December 1996 Board of Directors meeting, the Company declared a cash
dividend to holders of Series A Cumulative Preferred Stock of $0.722 per share.
This dividend is payable in equal quarterly installments of approximately $0.181
per share, the first two were paid on January 15, 1997 and April 15, 1997.
Additional quarterly installments will be paid on July 15, 1997 and October 15,
1997 to shareholders of record on the first day of each of those months.
Business Outlook and Recent Developments
Sea Pines Senior Living Center, Inc., a wholly owned subsidiary of the Company,
has completed construction of the health care facility located within the
TidePointe Continuing Care Retirement Community at an approximate cost of
$7,700,000. In February 1997, the facility received its operating licenses from
the South Carolina Department of Health and Environmental Control and began
operations. Net operating losses totalling $540,000 through April 30, 1997 have
been included in the Company's consolidated financial statements. Sea Pines
Senior Living Center, Inc. has negotiated, and expects to enter into an asset
purchase agreement with The Rogers Center, LLC to sell the facility for a
purchase price of approximately $8,450,000. The Rogers Center, LLC is a wholly
owned subsidiary of TidePointe Partners of which the Company is a minority
general partner. The asset purchase agreement is pending required regulatory
approval from the South Carolina Department of Health and Environmental Control.
After recouping the construction cost, Sea Pines Senior Living Center, Inc. will
recognize a gain of approximately $750,000 on this sale. This gain is expected
to equal the net operating losses incurred in operating the health care facility
through the transfer date. The Company expects that this transaction will close
and the gain will be recognized in the
11
<PAGE> 12
third quarter. After this point, the Company will only participate in the
TidePointe development and related health care operations through its 17.5%
general partner interest in TidePointe Partners.
The Company is in the final planning stages for construction of a new conference
center in Harbour Town, adjacent to the Harbour Town Clubhouse. The facility
will include approximately 15,000 square feet and contain a ballroom, meeting
space and catering kitchen facilities. Management believes this facility will
enhance the Company's existing facilities and enable the Company to be more
competitive in attracting small group meetings and other functions to Sea Pines.
Construction will begin upon final governmental approvals and is anticipated to
cost approximately $4,700,000 and take approximately one year to complete.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is a defendant in a lawsuit filed in November 1995 in
Beaufort County, South Carolina by Grey Point Associates, Inc. and its
principals relating to a contractual relationship. The suit alleges
breach of contract and seeks unspecified damages. The Company has
answered the suit and filed a counter-claim for unspecified damages.
The Company intends to defend its position vigorously and pursue its
counter-claim against the plaintiff, however, neither the Company or
its legal counsel can form an opinion as to the outcome of this matter
at this time.
The Company is not currently involved in any other litigation which it
believes will have a material and adverse affect on its financial
condition or results of operations.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters To A Vote of Security Holders
a) The Annual Meeting of Shareholders of the Company was held at
3:00 p.m. (EST) on March 1, 1997.
12
<PAGE> 13
b) The following Directors of the Company were elected during the
Annual Meeting.
Paul B. Barringer, II
Norman P. Harberger
Michael E. Lawrence
Thomas C. Morton
Robert W. Siler, Jr.
The following Directors' terms of office continued after the
Annual Meeting:
Thomas G. Daniels
Ralph L. Dupps, Jr.
Charles W. Flynn
Arthur P. Sundry
Frank E. Zimmerman, Jr.
Angus Cotton
P. R. Easterlin, Jr.
James L. Gray
John G. McGarty
Joseph F. Vercellotti
c) At the Annual Meeting the Shareholders ratified the
appointment of Ernst & Young LLP as independent auditors for
the Company for the fiscal year ending October 31, 1997. The
ratification passed with 1,344,750 affirmative votes, 0
negative votes and 0 abstaining votes.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
27-Financial Data Schedule (For SEC use only)
(b) Reports on Form 8-K:
None
13
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SEA PINES ASSOCIATES, INC.
Date: June 12, 1997 /s/ Charles W. Flynn
------------- --------------------
Charles W. Flynn
Chairman
Date: June 12, 1997 /s/ Thomas C. Morton
------------- --------------------
Thomas C. Morton
Treasurer
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS CONTAINED IN THE APRIL 30, 1997 FORM
10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH APRIL 30, 1997 FORM
10-Q.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> APR-30-1997
<CASH> 2,685
<SECURITIES> 0
<RECEIVABLES> 2,357
<ALLOWANCES> 27
<INVENTORY> 781
<CURRENT-ASSETS> 6,044
<PP&E> 47,583
<DEPRECIATION> 9,172
<TOTAL-ASSETS> 48,786
<CURRENT-LIABILITIES> 8,005
<BONDS> 0
0
7,218
<COMMON> 2,166
<OTHER-SE> 4,085
<TOTAL-LIABILITY-AND-EQUITY> 48,786
<SALES> 15,349
<TOTAL-REVENUES> 15,349
<CGS> 10,749
<TOTAL-COSTS> 10,749
<OTHER-EXPENSES> 4,169
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 661
<INCOME-PRETAX> (230)
<INCOME-TAX> 78
<INCOME-CONTINUING> (152)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (152)
<EPS-PRIMARY> (0.32)
<EPS-DILUTED> (0.32)
</TABLE>
